Labour law –Problem sums with solutions:

1. Thirty workmen were registered under Trade Union, after registration five
were terminated from employment for different reasons. Now the
registration of the trade union is said to be valid. Decide
Fact:

● Thirty workmen were initially registered under the Trade Union Act of
1926.
● Subsequently, five of these workmen were terminated from their
employment for different reasons.
● The registration of the trade union is being questioned concerning its
validity after the termination of these five workmen.

Relevant Legal Principles:

Trade Union Act of 1926: This Act provides for the registration of trade unions
and governs their functioning in India.

Industrial disputes Act 1947: This Act provides the provisions related to
Industrial disputes including the termination of employees

Analysis:

TU Act 1926 and ID Act 1947, These both the Act are different in nature but
interlinked with each other, the industrial disputes It even has provisions
regarding conditions for layoffs, retrenchment (reduction in the size of
operations) and closure of industry etc everything needs to be fought through
Trade Unions. So here trade union validity is necessary.

The Composition of Trade Union:

● Mandatory minimum 7 subscribers or more employees from the same

industry or the combination of the employees belongs to similar
establishment/industries can form a Trade union but cannot join out of
scope subscribers
● Can make an application for registration under section 4 of the Trade
Union Act, 1926 will be validated by the Registrar.
 ● Under Section 9A of Trade Union Act 1926 Minimum requirement related
to the membership of a trade union given with below conditions

firstly

● No trade union of workmen shall be registered unless at least 10% or 100

of the workmen, whichever is less engaged in the employment of the
establishment are its members on the date of making of its application
and

secondly

● no trade union shall be registered unless on the date of making of

application, minimum seven of its members as subscribers who are
workmen are employed in the establishment or industry.

Validity of Registration: The validity of the registration of a trade union may be

challenged if it fails to meet the requirements under the section 9A of Trade
Union Act 1926. It will be the prima facie case where incase if not satisfied will
lead to cancellation under section 10 of the Act by the registrar.

Case law 1: Bokajan Cement Corporation employees' Union V. Cement

corporation of India Ltd.

In this case the question were raised that

Whether an employee's membership in a trade union automatically ceases
upon cessation of employment?

Court held the answer as 'No' that the employees membership in a trade union
will not automatically cease based on cessation of employment.

Case Law 2:
The Chief Executive vs The Commissioner Of Labour

Trade union of workmen shall be registered unless at least with 10% or 100,
whichever is less, subject to a minimum of 7 workmen engaged or employed in
the establishment or industry with which it is connected are the members of
such trade union on the date of making of application for registration, Registrar
can cancel the registration under section 10 if the criteria is not satisfied.

Case Law 3:
Philips Workers’ Union and Anr. V. Registrar of Trade Union and Or.
In this case it was held that union may cancel the registration of the trade
union if the members of the trade union are fewer than 7 or fall short of 10% of
the total members will lead to cancellation under section 10 of the act by the
registrar

Conclusion:

● Here, only five of the members are terminated from the employment not
from the trade union
● Also as the member of the trade union the five members have all the
rights to fight for their rights through trade union
● Removing them from the employment will not affect the registration of
the trade union
● Also these five members also can join any other employer belonging to
the same industry in the given time and can continue as members.
● Also the trade union can join new members whenever in need.
● Therefore, the registration of TU is valid here.

Based on the facts and legal principles outlined above, If 30 Members have
been registered in the trade union, the registration of the trade union remains
valid even after the termination of five of its members. As long as the initial
registration requirements were met, including having at least seven members
who are workmen, the registration remains valid regardless of subsequent
changes in membership due to termination or resignation. Therefore, the
registration of the trade union in this scenario is considered valid.
 2. Majority of workmen applied for casual leave, Employer reject the leave
and treated as absence of workmen as illegal strike, Decide

Explanation:

Concept: Mass leave is not a strike

Sections Involved:

Section 26 to Section 29 of the Industrial Disputes Act of 1947 speaks about

illegal strikes

Relevant case law:

Ram Sarup and Another Vs Rex, AIR 1949, All 218

● Union requested to declare May Day as holiday

● They were ready to compensate too.
● Management didn’t agree.
● Workmen took mass leave.
● Company treated as absent and filed suit against workmen that they have
involved in illegal strike

Judgement: Court held that mere absence from work is not enough but there
must be concerted refusal to work, to constitute a strike. So it will not be
considered as illegal strike falls under section 6 to 29 of Industrial dispute act.

Conclusion: Similar to above case law, the mass leave of the workmen and
absence to work will not be considered as illegal strike. In case if they have not
returned to their work or refused to do their work then only it will be
considered an illegal strike.
 3. In a factory employing 999 persons, the wages of the workmen has been
fixed to be paid on 7th march, employees did not receive the payment and
on 12th March the employee is claiming for the delay of payment of
wages. Is there any delay in the payment of wages

Relevant sections:
1. Section 4 of Payment of wages act 1936 - Employers can fix the date for
payment of wages not exceeding 1 month.
2. Section 5 of Payment of Wages Act 1936
Payments should be made before
● the 7th day of the month if the number of workers is less than 1000, and
● the 10th day if the number of workers is greater than 1000.

3. Section 20 - Penalty for delay in payment of wages

● Punishable with fine which shall not be less than 1500/- rupees but which
may extend to 7500/- rupees. If any person fails or wilfully neglects to
pay the wages of any employed person by the date fixed by the authority,
in this behalf, he shall, without prejudice to any other action that may be
taken against him, be punishable with an additional fine which may
extend to Rs.750 for each day for which such failure or neglect continues.

● For subsequent conviction of the same offence, Imprisonment for a

period of not less than one month and not more than six months, and a
fine of not less than Rs.3750, but not more than Rs.22500.

Similar case law :

Cit vs Madras Radiators & Pressings Ltd

It is true that section 5 of the Payment of Wages Act provided for payment of
wages in respect of certain categories of industries on or before the 7th day of
succeeding month. However section 4 of the Act provided for fixation of wage
period and also provided that no wage period shall extend one month incase of
delay more than 1 month then the employer is liable with punishment.

Analysis:
In our Problem,
 ● no of workers are 999, which is less than 1000.
● It states that employee is claiming for the delay of payment on 12th
March which clearly understood that the payment has not been made
before 7th of the month
● Therefore, section 5 of the said Act has not been followed by the
employer.
● Hence there is a delay in the payment of wages where employer is liable
under section 4, section 5 and need to pay the salary with penalty under
section 20 of Payment of wages act 1936

4. X, a workman under the trade union act is retrenched from service by the
employer by oral order, X challenges the validity of retrenchment. Discuss

Concept: Retrenchment Notice Period is mandatory and must give notice in

written

Similar Case law: Pramod Jha v. State of Bihar

In this case the Supreme Court explained that retrenchment as per Section
2(oo) of Industrial Disputes Act, 1947 must satisfy the following requisites:

● Workman must be served with one month's notice in writing indicating

the reasons for retrenchment,
● Retrenchment must be effective after the expiry of one month notice
period, or the workman should be paid wages in lieu of the said notice
period,
● The workman should be paid compensation equivalent to 15 days'
average pay for each completed year of continuous service or any part
exceeding 6 months,
● Serving notice to the appropriate Govt. Or the authority specified in the
prescribed manner

In the case of Laxmi Devi Sugar Mills Ltd. v. Ram Sagar Pandey, the Supreme
Court of India states certain conditions that need to be followed while
retrenching the employees. The following conditions will be considered valid
for retrenchment:
 1. It is the employer’s responsibility to prove that the
retrenchment is taking place due to financial issues like a
decline in business due to trade reasons or on account of
surplus labour. No other reason would be considered valid.
2. Before retrenchment, the employer must send a notice in
writing with proper reasons to the employees who will be
retrenched, and also retrenchment compensation must be
paid to them as stated in Section 25F of the Industrial Dispute
Act, 1947.
3. While retrenching the employees, the employer must follow
the principle ‘last come, first go’. It means that those who
were employed last among all the other employees will be the
first to be retrenched.
4. Another condition stated by the Court was that the employers
need to prove that there are no other alternatives to
retrenchment, like transferring or redeploying the employees
to other places, or the presence of any other options.

Conclusion:

These are the grounds that the employers of an establishment have to follow
before retrenching the employees from their services.

Also, the Court held that oral termination without any written notice or
reasons provided to the employees is not valid under the Industrial Disputes
Act. The Court emphasized the importance of following due process and
providing proper notice to employees before terminating their services. Oral
termination can be challenged as arbitrary and unfair, especially if it does not
comply with the provisions of the Industrial Disputes Act.

The termination of employees must be done in accordance with the provisions

of law, which typically require written notice providing reasons for termination.
Oral termination, without adhering to these requirements, may be considered
invalid and could lead to legal consequences for the employer.
 5. A member of a registered trade union contested for a seat of assembly
election as a B.J.P Candidate and spent general funds for his election
campaign. Is it valid?

Explanation:
According to Section 15 of Trade Union Act,

● a registered trade union can create a general fund.

● Members of the registered trade union have to contribute to the general
fund.
● The fund can be spent for the purposes as specifically stated in the
Section 15 of the act.

Purposes for which the General Fund can be utilized are:

1. The payment of salaries, allowances and expenses to office bearers of

the trade union.
2. The payment of expenses for the administration of the trade union
including an audit of accounts of the general fund.
3. The expenses in connection with prosecution or defense undertaken
for the purpose of securing or protecting any rights of the trade union.
4. The conduct of trade disputes on behalf of the union or any member.

Section 16 -Political funds, on the other hand, are specifically dedicated

to influencing political processes and promoting the interests of workers
in the broader societal sphere. Contributions to these funds are typically
voluntary and subject to specific opt-in procedures. Political funds are
used to:

● Support political candidates and parties that align with the trade union’s
values and objectives.
● Lobby government officials on issues impacting workers’ rights, such as
labor laws, social security, and minimum wage regulations.
 ● Conduct political campaigns and raise awareness about issues important
to workers, such as workplace safety, income inequality, and social
justice.

Case law 1: Mario Raposo vs H.M. Bhandarkar and others

● The petitioner as well as the respondent were members of a union called

VCO bank employees Association, Nagpur.
● The office bearers of the union purchase shares of UTI In their individual
name out of the union general fund .
● It was held that purchase of shares cannot be termed as investment
under section 15 of the act as it is a speculative activity.
● Section 15 of act does not allow spending of the fund of the union on
speculative activity.

Case law 2: A Registered Society V. Union of India & Others

This is the Public Interest litigation case where the general funds and
political funds of trade unions were misused by politicians, even their
own funds brought inside trade unions for spending. In this case Supreme
court judges clearly mentioned that funds spent for political reasons will
be scrutinized.

Conclusion:

According to above provisions stated u/s 15 of the said Act,

● spending general funds for political purposes are not VALID Instead
separate Political funds must be established as u/s 16 of TU Act 1926 to
be used for election campaigns. So here the BJP candidate used general
funds for election is invalid. Only if they have collected separate funds for
election under Section 16 then it will be valid for election funds, the
source of the funds used in the election will be scrutinised.
 6. Shankar, a workmen who is laid off by his employer at Chennai refused to
accept an alternative employment in another establishment belonging to
the same employer situated in Bangalore. Shankar decided to claim lay
off compensation.

Analysis:
1. Section 25E in The Industrial Disputes Act, 1947
25E. Workmen are not entitled to compensation in certain cases.
- No compensation shall be paid to a workman who has been laid-off-
(i) if he refuses to accept any alternative employment in the same
establishment from which he has been laid-off, or in any other establishment
belonging to the same employer situate in the same town or village or situate
within a radius of five miles from the establishment to which he belongs, if, in
the opinion of the employer, such alternative employment does not call for any
special skill or previous experience and can be done by the workman, provided
that the wages which would normally have been paid to the workman are
offered for the alternative employment also;
(ii) if he does not present himself for work at the establishment at the
appointed time during normal working hours at least once a day;
(iii) if such laying-off is due to a strike or slowing-down of production on the
part of workmen in another part of the establishment.

One significant case that addresses the issue of employees refusing alternative
jobs within the same establishment but in different locations is

Haryana State Agricultural Marketing Board v. Mange Ram

Facts:In this case, the Haryana State Agricultural Marketing Board had
retrenched several employees due to closure of a particular market yard. The
Board offered alternative employment at another market yard located at a
different place. However, some employees refused to accept the alternative
jobs at the different locations.

**Explanation:** The Industrial Disputes Act, 1947, aims to provide protection

to employees in case of retrenchment or closure of establishments. Section
25G of the Act mandates that in case of retrenchment, an employer must
provide alternative employment to the affected employees, if available.
However, the Act does not specify that the alternative employment must be in
the same location as the original job.

**Judgement:** The Supreme Court, in its judgement, held that when an

employer offers alternative jobs to retrenched employees in different locations
within the same establishment, the employees cannot unreasonably refuse
such offers. The Court emphasized that the purpose of offering alternative
employment is to mitigate the hardship caused by retrenchment, and
employees should not unreasonably reject such offers, especially when they
are within the same establishment.

Solution: Court established the principle that employees cannot refuse

alternative jobs solely on the basis of location within the same establishment.
If the alternative employment offered is suitable and reasonably comparable to
their previous jobs, employees are obligated to accept it to mitigate the impact
of retrenchment. This judgement ensures a balance between the rights of the
employees and the interests of the employer in managing their establishment
efficiently.

7. ‘A’ daily wages employee working with Rajasthan state ganganagar sugar
mills ltd., made a claim that he worked continuously from March 1, 2014
to July 15, 2016 and he was orally terminated. Since he worked for more
than 240 days, his termination was illegal and hence he should be
reinstated into service and workman demands that the management has
to produce muster rolls for a certain period. Whether the workman
succeeds.
Explanation:
Assistant Engineer, Rajasthan Development Corporation And Another v. Gitam
Singh.

Issue

● Whether the direction to the employer for reinstatement with continuity

of service and 25% back wages is legally sustainable when the workmen
had worked for only 8 months as a daily wager and his termination has
been held to be in contravention of ID Act,1947

Summary

· The appellant challenges the finding of the labour court that the
respondent had worked for 240 days continuously in the year preceding the
date of termination.

· The appellant argues that the award of reinstatement with continuity of

service and 25% back wags is unjustified as the respondent was a daily
wager and worked only for a short period.

· The court, however, upholds the findings of the labour court and cites
previous cases where reinstatement was not considered desirable.

· The court modifies the award of reinstatement with compensation.

Decision

· The court concluded that the labour court failed to exercise its judicial
discretion appropriately and hence ordered the appellant to pay
compensation of Rs.50.000 to the respondent.

Another Case law

Rajasthan State Ganganagar S. Mills Ltd vs State Of Rajasthan & Anr on 13

September, 2004

In this case also employee worked more than 240 days in the

Conclusion:
It was held that
 ● The Labour Court should consider the evidence and come to a definite
conclusion as to whether the workman had worked for 240 days during
the period claimed.
● Also oral termination is not valid and need to give notice in written
● If its answer is in negative the Labour Court shall pass appropriate orders.

8. The workman was appointed as a conductor on daily wages in the

corporation on 20th of June 2015. His services were terminated on 1st of
December 2015 on the grounds that he had not issued tickets to six
passengers. He challenged the said termination was contrary to the sec
25f of I.D Act- whether the workman can succeed?
Case law:
Rajasthan State Road Transport Corporation (R.S.R.T.C)
V.
Deen Dayal Sharma

Conductor was working with Rajasthan Transport corporation got caught in a

sudden inspection that he had not issued tickets for 6 passengers and he was
terminated without any internal inquiry. So Deen Dayal filed a suit against his
termination, where the civil court said such termination is unlawful and such
industrial disputes must be handled by the Industrial tribunal to get the better
solution and remedy.

Under Section 25F of Industrial dispute act 1947 Conditions precedent to

retrenchment of workmen.--No workman employed in any industry who has
been in continuous service for not less than one year under an employer shall
be retrenched by that employer until–

(a) the workman has been given one months notice in writing indicating the
reasons for retrenchment and the period of notice has expired, or the workman
has been paid in lieu of such notice, wages for the period of the notice;

2* * * * *
(b) the workman has been paid, at the time of retrenchment, compensation
which shall be equivalent to fifteen days' average pay 3[for every completed
year of continuous service] or any part thereof in excess of six months; and

(c) notice in the prescribed manner is served on the appropriate Government

Solution: Here in our case the conductor has not completed 1 year of his
service and it is approximately 5 months and 10 days (Approx. 162 days) of
service that also as daily labour. He must be served notice with proper reasons
for his termination, the conductor can file a suit under the Industrial dispute
order under section 25F, but based on the eligibility and the facts involved the
court may decide is valid or not.

9. An employer failed to pay minimum wage on the ground that his industry
has become bankrupt. Workers in that industry agitated for payment of
minimum wages. Decide

Explanation:
Minimum wages is the wage that is able to provide not only for the bare
physical needs but also for preservation of efficiency of workers plus some
measure of education, health and other things.

Bijoy cotton Mills Ltd., vs. State Of Ajmer

● Bijoy cotton Mills was running at a loss.

● So, it couldn't pay the prescribed minimum wages to its workers.
● However, the workers offered to work for wages below the minimum
wage.
● The State of Ajmer questioned the mills for not paying minimum wages
to the workers.
● In an appeal by the mills to the SC, it held that even if it runs in loss, it is
mandatory to pay minimum wages to its workers.
● It also observed that if it is unable to pay, then it is better to close its
operations than run the mills by not paying the minimum wages to its
workers.

Section 25FFF in The Industrial Disputes Act, 1947

Compensation to workmen in case of closing down of undertakings.

(1)Where an undertaking is closed down for any reason whatsoever, every

workman who has been in continuous service for not less than one year in that
undertaking immediately before such closure shall, subject to the provisions of
sub-section (2), be entitled to notice and compensation in accordance with the
provisions of section 25-F, as if the workman had been retrenched:

Provided that where the undertaking is closed down on account of unavoidable

circumstances beyond the control of the employer, the compensation to be
paid to the workman under clause (b) of section 25-F, shall not exceed his
average pay for three months.

[Explanation .-

An undertaking which is closed down by reason merely of-

(i)financial difficulties (including financial losses); or

(ii)accumulation of undisposed of stocks; or

(iii)the expiry of the period of the lease or licence granted to it; or

(iv)in case where the undertaking is engaged in mining operations, exhaustion

of the minerals in the area in which operations are carried on, shall not be
deemed to be closed down on account of unavoidable circumstances beyond
the control of the employer within the meaning of the provision to this
subsection.

10. Some workmen of Industry participated in an illegal strike. Employer

wants to claim damages for breach of contract of employment against the
said workman. Decide

Strikes Sections Under Industrial Disputes Act 1947,

● Section 2(q): "strike" means a cessation of work by a body of persons
employed in any industry acting in combination
● Section 2(k)"industrial dispute" means any dispute or difference between
employers and employers, or between employers and workmen, or
between workmen and workmen.
● Section 22 : Proper Notice must be served for public utility services,
without proper notice, cannot perform Strike.
● Sections 26 to 29 of the Industrial Disputes Act of 1947 speaks about
illegal strikes

● Section 26 : Any workman who commences, continues or otherwise acts

in furtherance of, a strike which is illegal under this Act, shall be
punishable with imprisonment for a term which may extend to one
month, or with fine which may extend to fifty rupees, or with both.

● Section 27 : Any person who instigates or incites others to take part in, or
otherwise acts in furtherance of, a strike or lock-out which is illegal under
this Act, shall be punishable with imprisonment for a term which may
extend to six months, or with fine which may extend to one thousand
rupees, or with both.

● Section 28: Any person who knowingly expends or applies any money in
direct furtherance or support of any illegal strike or lock-out shall be
punishable with imprisonment for a term which may extend to six
months, or with fine which may extend to one thousand rupees, or with
both

● Section 29: Any person who commits a breach of any terms of any
settlement or award, which is binding on him under this Act, shall be
punishable with imprisonment for a term which may extend to six
months, or with fine.

Case law 1: Kameshwar Prasad V. State of Bihar

In this case the court held that strike is not a fundamental right,
proper notice must be served.

Case law 2: Jay Engineering Workers Ltd. V. State of West Bengal

In this case employees involved in unfair labour practice and
involved in Gherao Strike, Usually, a group of employees would surround
the employers and their buildings and does damages to the
employers,office, furnitures etc... until their demands are met, Court held
that such strike is illegal and the employees involved in such unfair labour
practice will be held liable and need to pay for the damages.
 Solution: Similar to above case law the employer can file the suit against
the illegal strike and claim the damages for the loss happened. Court will
decide the compensation based on the facts involved.

11. A trade union member who was poor but very popular and who has
not contributed to political fund requests the help from general funds for
his election. Trade union refused to help from general funds for his
election- Decide

Explanation

According to Section 15 of TU Act,

● Spending funds of the union on activities other than those mentioned u/s
15 of the Act is not allowed.
● Political funds should be collected separately under section 16 of Trade
union act and only that fund can be utilised for political reasons and
elections.

Mario Raposo vs H.M. Bhandarkar and others

● The petitioner as well as the respondent were members of a union called
VCO bank employees Association, Nagpur.
● The office bearers of the union purchase shares of UTI In their individual
name out of the union general fund .
● It was held that purchase of shares cannot be termed as investment
under section 15 of the act as it is a speculative activity.
● Section 15 of act does not allow spending of the fund of the union on
speculative activity.
Conclusion:
● Section 15 of act does not allow spending of the fund of the union on
political activity, so the Trade union rejected his request to use for
political funds is valid here.